Tehran had appealed a 2014 New York Circuit Court of Appeals ruling upholding the legality of a 2012 law, which stated that the frozen funds should go toward the $2.65 billion judgement the families won against Iran in a US federal court in 2007.

Over 1,000 American families had been involved in the ruling, which follows a lengthy legal battle over the fund and over compensation for Iranian terror attacks.

Among the attacks were a Hezbollah attack in 1983 on a US Marine Corps base in Beirut, and the 1996 Khobar Towers truck bombing in Saudi Arabia.

Wednesday's ruling, written by liberal justice Ruth Bader Ginsburg, determined that a Congressional intervention to help pass the 2012 law did not violate the US Constitution's separation of powers.